Sprint's statement stopped short of saying that the company would accept a full buyout:

Sprint today confirmed that it is currently engaged in discussions with Softbank regarding a potential substantial investment by Softbank in Sprint. Although there can be no assurances that these discussions will result in any transaction or on what terms any transaction may occur, such a transaction could involve a change of control of Sprint. Sprint does not intend to comment further unless and until an agreement is reached."

Softbank, meanwhile, had already downplayed the report, issuing a terse statement earlier this morning: "The story about SoftBank and Sprint Nextel Corporation being reported is based on speculation. We have not announced anything. We do not comment on speculation."

If Softbank were to acquire Sprint, it would be the second major transaction in the mobile industry lately. Just last week, Deutsche Telekom announced plans to acquire regional carrier MetroPCS and merge it with T-Mobile.

Related stories

Soon after that deal was announced, reports surfaced saying that Sprint was considering making its own bid for MetroPCS to head off a merger with T-Mobile. That plan was reportedly thrown on ice to give Sprint time to see exactly what Deutsche Telekom offered and determine whether its own acquisition bid would make sense.

A combination of T-Mobile and MetroPCS would present a serious challenge to Sprint in the rough-and-tumble prepaid wireless business even as Verizon Wireless and AT&T continue to grow at the high end.

Softbank, long headed by CEO Masayoshi Son, has nearly 30.5 million subscribers across Japan, making it one of the largest carriers in that country. According to the company's corporate data page, Softbank currently has over 177 billion yen (about $2.3 billion) in capital, so it's possible the company might use its stockpile to help fund the massive Sprint deal.

On October 1, Softbank acquired its Japanese mobile infrastructure and services rival eAccess in a stock-swap deal valued at $2.3 billion. The combination of the firms made Softbank the number two mobile phone provider in Japan, with more than 34 million subscribers, trailing KDDI, which has about 40 million subscribers.